Rosenthal & Rosenthal completed a $1.75 million purchase order finance facility to support a California-based apparel company with worldwide operations that needed to complete financing before the Chinese New Year.
The facility allowed the client to address its immediate financing requirements for the Chinese New Year and ensure that the company’s product flow from Asian suppliers would continue uninterrupted during the busy period.
In observance of the holiday, most Chinese-based businesses will be closed for business from February 9th through February 15th in mainland China and through February 13th in Hong Kong. Normal operations across the country should resume starting February 18th.
The client experienced a substantial increase in orders of its product when it was licensed for sale by a large national retail chain. The influx of larger-than-projected spring orders led the company to seek out a solution that would ensure it could make the critical payments necessary to overseas suppliers on time.
Rosenthal’s facility assisted with the funding of product to fulfill the sales orders prior to the Chinese New Year. The supply chain financing requirements of the transaction involved the purchase of product from multiple international suppliers via documents against payment for in-transit goods as well as for product that had already arrived at the company’s third-party logistics facility. Rosenthal’s advance rate was 100% on the cost of the pre-sold inventory.
“In 2017 and again this year, we launched a purchase order financing program designed to assist consumer products companies just like this client with their Chinese New Year supply chain finance requirements,” said Rosenthal Division Head Paul Schuldiner. “The ongoing expansion of cross border trade requires familiarity and responsiveness to the seasonal cash flow issues of suppliers in Asia. As was the case in this transaction, we’re committed to providing creative and soundly structured finance solutions that meet the specific needs of these types of global companies.”
